Realty bites: Supreme Court hints at auctioning Unitech assets

Reiterating its earlier order asking embattled real estate company Unitech to give complete details of its unencumbered properties the Supreme Court said that it will consider auctioning these assets to raise money to refund homebuyers.

Reiterating its earlier order asking embattled real estate company Unitech to give complete details of its unencumbered properties the Supreme Court said that it will consider auctioning these assets to raise money to refund homebuyers.

Reiterating its earlier order asking embattled real estate company Unitech to give complete details of its unencumbered properties, including promoters’ personal assets, the Supreme Court on Monday said that it will consider auctioning these assets to raise money to refund homebuyers. While the SC had on March 5 asked Unitech to submit an affidavit with the complete details of its and its subsidiaries’ unencumbered assets in India and abroad, the company on Monday sought more time to do so. It also warned that if any false declaration with regard to its properties in the affidavit is made, contempt proceedings will be initiated against the company and its promoters. A total of 4,688 home buyers are claiming a refund of Rs 1,865 crore from Unitech. They have booked units in various projects undertaken by the company. A bench headed by Chief Justice Dipak Misra, while dismissing the J Financial Asset Reconstruction Company’s impleadment application, also imposed a cost of Rs 25 lakh on it for diverting the court’s attention from the home buyers’ issue. JM Financial ARC had in 2016 taken over loans advanced by HDFC Bank to Unitech. The judges said that the asset reconstruction company had given the impression that it would pay the money for refund of homebuyers and now the entire proceeding had been diverted. “It is no help to home buyers. Impression was created that it will help the home buyers. We treat it as an unnecessary diversion form the main case,” the bench said, while refusing to recall its order imposing fine.

The JM Financial counsel told the court that the lender had rescheduled the realtor’s existing loans. However, he said that the lender is not taking any obligation to construct the flats. The counsel also conceded that Unitech had suggested JM Finance to file the impleadment application. Unitech had last week claimed that the lender firm was willing to finance its under-construction housing projects. The judges had then asked the JM Financial ARC managing director and its competent officer to be personally present in the court “to answer the questions put by the court”. Unitech senior counsel Ranjit Kumar told the bench that the lender is disbursing loans for the completion of 17 projects located in Chennai, Bengaluru, Kolkata and Gurgaon. He also said that Unitech will submit the asset details in a sealed cover. However, the CJI asked him to share a copy with amicus curiae Pawanshree Agarwal. Counsel Gopal Shankaran, appearing for a complainant in the criminal case, sought a copy of the assets, saying Unitech in its affidavit earlier had showed Rs 4,500 crore as the reserve and surplus money in its balance sheet. Besides, the realtor has many companies based in tax havens like Cypress. The next date of hearing is on March 26. Unitech managing director Sanjay Chandra, currently in jail, is seeking interim bail from the apex court after the Delhi High Court on August 11 last year rejected the plea in a criminal case lodged in 2015 by 158 home buyers of Unitech projects Wild Flower Country and Anthea Project in Gurgaon.